CHARTER FOR THE AUDIT COMMITTEE

The Female Health Company

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• Publié par: Obba
• Nombre de lectures: 13
• Langue: English

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CHARTER FOR THE AUDIT COMMITTEE

OF THE BOARD OF DIRECTORS

OF THE FEMALE HEALTH COMPANY

(as amended as of February 27, 2004)

PURPOSE:

The Audit Committee is appointed by the Board of Directors to monitor the

corporate financial reporting and the internal and external audits of The Female Health

Company (the "Company").

The Audit Committee is directly responsible for the

appointment, compensation and oversight of the work of the Company's independent

auditors, including the resolution of disagreements between management and the auditor

regarding financial reporting.

The Audit Committee shall assist the Board of Directors

with oversight of (i) the integrity of the Company's financial statements, the accounting

and financial reporting process of the Company and the audits of the financial statements

of the Company; (ii) the Company's compliance with legal and regulatory requirements;

(iii) the independent auditor's qualifications and independence and (iv) the performance

of the Company's internal audit function and independent auditors.

In addition, the Audit Committee will undertake those specific duties and

responsibilities listed below and such other duties as the Board of Directors from time to

time prescribe.

The function of the Audit Committee is oversight.

The management of the

Company is responsible for the preparation, presentation and integrity of the Company's

financial statements.

Management is responsible for maintaining appropriate accounting

and financial reporting principles and policies and internal controls and procedures

designed to assure compliance with accounting standards and applicable laws and

regulations.

The independent auditors are responsible for planning and carrying out a

proper audit and reviews, including reviews of the Company's quarterly financial

statements prior to the filing of each quarterly report on Form 10-Q, and other

procedures.

In fulfilling their responsibilities under this charter, it is recognized that

members of the Audit Committee are not full-time employees of the Company and are

not, and do not represent themselves to be, accountants or auditors by profession.

As

such, it is not the duty or responsibility of the Audit Committee or its members to

conduct auditing or accounting reviews or procedures, and each member of the Audit

Committee shall be entitled to rely on (a) the integrity of those persons and organizations

within and outside the Company from whom it receives information and (b) the accuracy

of the financial and other information provided to the Audit Committee by such persons

or organizations.

The independent auditors for the Company are ultimately accountable to the

Audit Committee and the Board of Directors.

The Audit Committee has the direct

authority and responsibility to select, evaluate and, where appropriate, replace the

independent auditors (or to nominate the independent auditors to be proposed for

shareholder approval in the proxy statement).

The Company shall provide the Audit

Committee with appropriate funding for payment of compensation, fees and expenses to

the independent auditors and to counsel or other advisors that the Audit Committee may

deem appropriate to engage.

MEMBERSHIP:

The Audit Committee will consist of at least three members of the Board, each of

whom shall be "independent directors" within the rules of the Nasdaq Stock Market, shall

not be an officer or employee of the Company or its subsidiaries and shall not have any

relationship which, in the opinion of the Board of Directors, would interfere with the

exercise of independent judgment in carrying out the responsibilities of a director.

One

member of the Audit Committee shall be an "audit committee financial expert" as may be

defined by the rules of the Securities and Exchange Commission.

RESPONSIBILITIES:

The responsibilities of the Audit Committee shall include:

1.

Reviewing on a continuing basis the adequacy of the Company's system of

internal control over financial reporting and the Company's disclosure

controls and procedures;

2.

Reviewing on a continuing basis the activities, organizational structure

and qualifications of the Company's internal audit function;

3.

Reviewing the independent auditors' proposed audit scope and approach,

including, when applicable, audit procedures with respect to the

Company's internal control over financial reporting;

4.

Reviewing with management and the independent auditors the audited

financial statements and audit findings, including any significant

suggestions for improvements provided to management by the

independent auditors and any serious difficulties or disputes with

management encountered during the course of the audit, and reviewing the

other financial disclosures in the Company's Form 10-K report, including

Management's Discussion and Analysis of Financial Condition and

Results of Operations;

5.

Having a predetermined arrangement with the independent auditors that

they will advise the Audit Committee through its Chair and management

of the Company of any significant or material issues identified through

procedures followed for interim quarterly financial statements, and that

such notification as required under standards for communication with

Audit Committees is to be made prior to the related press release, or, if not

practicable, prior to filing the Company's Form 10-QSB for that quarter,

and receiving either an oral or written communication provided by the

independent auditors at the end of each of the first three quarters of the

year that they have nothing to report or enumerate as to the required

reporting issues to the Audit Committee Chair;

6.

Approving the appointment of the independent auditors, subject, if

applicable, to stockholder ratification;

7.

Approving fee arrangements with the independent auditors;

8.

Reviewing the performance and qualifications of the independent auditors

and reviewing the experience and qualifications of the senior members of

the independent auditor team, compliance by the independent auditors

with audit partner rotation requirements and the quality control procedures

of the independent auditors;

9.

Approving in advance the retention of the independent auditor firm for

any non-audit service that such firm is not prohibited from performing for

the Company and approving the fees for any such service;

10.

Ensuring that the independent auditors prepare and deliver annually a

Statement as to Independence (it being understood that the independent

auditors are responsible for the accuracy and completeness of this

Statement), and discussing with the independent auditors any relationships

or services disclosed in this Statement that may impact the objectivity and

independence of the Company's independent auditors and to recommend

that the Board of Directors take appropriate action in response to this

Statement to satisfy itself of the independent auditors' independence;

11.

Reviewing reports from the independent auditors regarding (a) critical

accounting policies used by the Company in its financial statements, (b)

all alternative treatments of financial information within generally

accepted accounting principles that the independent auditors have

discussed with management, ramifications of the use of such alternative

treatments and the treatment preferred by the independent auditors, and (c)

other material written communications between the independent auditors

and management;

12.

Recommending to the Board of Directors guidelines for hiring of

employees of the independent auditor who have been engaged on the

Company's account;

13.

Advising the Board of Directors with respect to the Company's policies

and procedures regarding compliance with applicable laws and

regulations;

14.

Reviewing with management and the independent auditors the effect of

any significant regulatory and accounting initiatives;

15.

Obtaining from the independent auditors assurance that Section 10A of the

Securities Exchange Act of 1934 has not been implicated;

16.

Meeting at least quarterly with management and the independent auditors

in separate executive sessions;

17.

Reviewing, in conjunction with counsel, any legal matters that could have

a significant impact on the Company's financial statements;

18.

Providing oversight and review of the Company's asset management

policies, including an annual review of the Company's investment policies

and performance for cash and short-term investments, and the Company's

risk assessment and risk management policies;

19.

If necessary, instituting special investigations and, if appropriate, hiring

special counsel or experts to assist;

20.

Reviewing related party transactions for potential conflicts of interest and

approving related party transactions;

21.

Establishing procedures for the receipt, retention and treatment of

complaints received by the Company regarding accounting, internal

accounting controls or auditing matters and for the confidential,

anonymous submission by employees of the Company or its subsidiaries

of concerns regarding questionable accounting or auditing matters;

22.

Performing other oversight functions as requested by the full Board of

Directors;

23.

Reviewing and updating the Audit Committee's charter annually and

recommending any proposed changes to the Board of Directors for

approval;

24.

Instructing the independent accountants that the independent accountants

are ultimately responsible to the Board of Directors and the Audit

Committee; and

25.

Preparing any report, including any report of the Audit Committee

required by the rules of the Securities and Exchange Commission to be

included in the proxy statement for the Company's annual meeting.

In addition to the above responsibilities, the Audit Committee will undertake such

other duties as the Board of Directors delegates to it, and will report regularly to the

Board regarding the Committee's examinations and recommendations.

MEETINGS:

The Audit Committee will meet at least two times each year.

The Audit

Committee may establish its own schedule which it will provide to the Board of Directors

in advance.

The Audit Committee will meet separately with the Chief Executive Officer and

separately with the Chief Financial Officer of the Company at least annually to review

the financial affairs of the Company.

The Audit Committee will meet with the

independent auditors of the Company, at such times as it deems appropriate, to review the

independent auditor's examination and management report.

REPORTS:

The Audit Committee will record its summaries of recommendations to the Board

in written form which will be incorporated as a part of the minutes of the Board of

Directors at which those recommendations are presented.

MINUTES:

The Audit Committee will maintain written minutes of its meetings, which

minutes will be filed with the minutes of the meetings of the Board of Directors.